Investors “still in the Dark” on Oil Contract Terms

Senior executives from several major oil companies have told Reuters that they still had not been given sufficient information about the geology of Iranian fields or contract terms, and that they were also unclear about how quickly they would be able to recoup their investment and who they could partner with locally.

BP Chief Executive Bob Dudley told the news agency:

“Iran is a large oil and gas province … but we don’t have any specific contracts right now … We’re going to have to be very careful. We don’t want to violate any sanction.”

The situation has not been helped by organizational changes at the National Iranian Oil Company (NIOC), with one Western consultant commenting:

“You go to Tehran and discover that the team that you have been talking to has completely changed.”

NIOC boss Ali Kardor (pictured) said his ministry would hold the country’s first tender, for the South Azadegan oil field, on 19th November, and then would tender one field every month for the next 11 months. Kardor’s deputy, Gholamreza Manouchehri, told a news conference that Iran had cleared 11 local firms to take part in tenders.

Potential Western investors say they have yet to see documentation for South Azadegan or any other field detailing its reserves or work they be required to do.

An executive from an oil major said:

“What we have seen so far is only a framework of the IPC [Iranian Petroleum Contracts]. Fees, terms are not clear. Iranian officials say that these issues will be negotiated between foreign companies and NIOC.“